Global Stocks Rise as Policymakers Tighten Monetary Policies

Asian stocks rose on September 18 as policymakers globally tightened monetary policies to combat inflation. Oil prices dropped, and the yen weakened ahead of a Bank of Japan meeting.

The US Federal Reserve raised interest rates for the first time in three years on September 16 and warned of more hikes in coming months. The European Central Bank also cautioned about further tightening after raising rates.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.55%, while Japan's Nikkei was up 0.9% and South Korea's KOSPI surged 2%. Bond prices steadied, with the 10-year US Treasury yield at 4.93%, its highest since 2007.

The Bank of England warned that it might need to hike rates if the Middle East conflict drags on. The yen softened ahead of the BOJ decision, which is expected to raise interest rates to a 31-year high and pledge more measures to combat inflation risks.